TLDR
- Rackspace Technology stock jumps 79.73% after Q1 net income rebounds to $8M
- RXT gains as public cloud revenue rises 7% and offsets private cloud weakness
- Rackspace Technology narrows operating loss as non-GAAP profit climbs 20% in Q1
- AMD AI infrastructure deal adds fresh growth context to Rackspace’s 2026 outlook
- Rackspace guides FY 2026 revenue at $2.6B to $2.7B after stronger Q1 results
Rackspace Technology (RXT) stock jumped after the company reported a clear earnings rebound for the first quarter. The stock rose 79.73% to $4.0799, although it eased from its intraday high. The move followed stronger net income, public cloud growth, and a new AMD AI infrastructure agreement.
Rackspace Technology, Inc., RXT
RXT Stock Jumps After Q1 Earnings Rebound
Rackspace Technology reported first-quarter revenue of $678 million, up 2% from $665 million a year earlier. The company also posted 1% revenue growth on a constant currency basis. The result showed steady demand across its hybrid cloud and AI services.
Net income reached $8 million in the quarter, compared with a $72 million net loss last year. Besides, earnings per diluted share improved to $0.03 from a $0.31 loss. Loss from operations also narrowed to $18 million from $38 million.
Non-GAAP operating profit rose 20% to $31 million from $26 million a year earlier. However, non-GAAP loss per share remained unchanged at $0.06. Capital expenditures increased to $35 million from $27 million.
Public Cloud Growth Supports Rackspace Results
Public Cloud revenue reached $443 million in the first quarter, up 7% on a reported basis. The segment also grew 6% on a constant currency basis. This growth helped offset weaker performance in the Private Cloud business.
Private Cloud revenue fell 6% to $235 million from $250 million last year. The segment declined 8% on a constant currency basis. The drop showed continued pressure in legacy cloud demand and related workloads.
Rackspace ended March with $94 million in cash and equivalents. Total liquidity stood at $295 million, including its revolving credit facility. Operating cash flow reached $5 million during the quarter.
AMD AI Deal Adds Growth Context
Rackspace also signed a Memorandum of Understanding with AMD during the earnings update. The agreement aims to build governed enterprise AI infrastructure for regulated companies. It also expands Rackspace’s position in hybrid cloud and managed AI services.
The company said regulated enterprises now want clearer control over AI operations. Hence, Rackspace plans to support workloads that need governance, security, and accountability. The AMD deal adds context to its broader enterprise AI strategy.
For 2026, Rackspace expects total revenue between $2.6 billion and $2.7 billion. It also projects adjusted EBITDA between $305 million and $315 million. Non-GAAP operating profit may reach $160 million to $170 million.
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